I meet with senior homeowners that are thinking about getting a reverse mortgage. Should I or shouldn’t I get a reverse mortgage? Is It Possible To lose my home? “Now the lending company will be on the title of my property, not me, correct?” Those are all very good questions and provide a place to begin to understand more about this loan. With many choices in life, you need to determine what makes the most sense. Reverse Mortgages are not any different. Below is a variety of information about reverse mortgage that you should give some thought to.

Take a look at these other pages: North Sacramento, Ben Ali, Hagginwood, Elvas

The PROS of Reverse Mortgages: (also called HECM – heck-uhm)
Increase your monthly cash flow for life or for a specified term. You can learn more about reverse mortgage optionsĀ  here.
You’re not bound to the decision you initially make. You can make modifications to the way you obtain equity from your home at any time, assuming equity remains. The remainder of the Credit line grows larger on a monthly basis at 1.25% over the current interest rate. A great choice for those that wish to stay in there home.
Relocating can result in emotional problems for a lot of elderly homeowners. Memories were created within your “home sweet home”, and close proximity to loved ones and remaining in your town can be a good choice.
You do not have to own you home free and clear to qualify for a reverse mortgage. Generally, the only out of pocket fees you will have are the HUD counseling fee and the appraisal. But other costs may apply depending on the situation and type of property.
You can not be evicted from your home as long as you are abiding by the agreement in the contract. Mainly these agreements include maintaining your home and paying your taxes, insurance and HOA dues.
You are able to refinance out of the reverse mortgage right into a traditional loan assuming you are eligible and there is equity in your home.
Neither you, your estate or your heirs can ever owe any more than the value of the home.
This is what known as a non-recourse loan. This means that, you have no personal responsibility for this loan, neither does your estate or your heirs.
Reverse Mortgages have several safeguards: capped interest levels, a limitation on fees, HUD counseling, asset protection (non-recourse loan), no maturity date (cannot become due during a borrower’s life-time).
Could be a financial tool to help heirs avoid some of the real estate tax.
Your heirs may be able to claim the interest from your mortgage on their income taxes after your passing. (Make sure you speak to your tax advisor for help.)

Those were the pros, the good things. Pretty easy, right? Now, I am sure you think that this is where I am going to stop. Fortunately for you I am going to share some of the bad things about reverse mortgages. Here are the cons:

The Negatives of Reverse Mortgages:
They can and quite often are more expensive than a traditional loan. However, you can not really compare them as they are different loan products.
In the event that whatever you are leaving for an inheritance is your home, there may or may not be equity for you to leave behind. A Reverse Mortgage really is a rising debt loan since you’re not making mortgage payments. It’s the opposite of a conventional mortgage loan where equity increases as mortgage payments are made.
Selling your property can often produce a larger return on your investment than a Reverse Mortgage.
Moving from your house in less than 5 years makes a Reverse Mortgage risky. It does not make good sense to use a Reverse Mortgage short term.
If you fail to pay your real estate taxes or homeowner’s insurance or fail to maintain your home, the bank may require repayment of the debt. (Financial institutions, however, will work with you to cure the default.)
If you are not living in your primary residence for a period surpassing 12 consecutive months, the Reverse Mortgage will become due. (Nursing homes, assisted living, moving, etc.)
You may not be entitled to needs based programs and support such as Medicaid.

When NOT to obtain a Reverse Mortgage:
An equity loan could be a cheaper way to get cash out of your property.
{In the event your main objective is improving your home, a community loan may work far better.|For those who just need to add a roof, windows or other energy efficient options. If that is the case, grants and assistance might be available. Go here for more reverse mortgage information.
For anyone who is ill and assisted living or a an elderly care facility is imminent, don’t choose a Reverse Mortgage.
When your family says you should not get a reverse mortgage, listen to them and have a meaningful discussion with them and the loan officer, together.
If you have other options such as moving in with relatives and buddies or the capability to spend money on senior living facilities.
A property owner whose residence makes use of at least 25% of the complete liveable space for their company won’t qualify for an FHA Reverse Mortgage.